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This ruling [Dodge vs Ford Motor Company (1919)] stands at the heart of the current situations being faced by companies like Google today. —- It really doesn’

This ruling [Dodge vs Ford Motor Company (1919)] stands at the heart of the current situations being faced by companies like Google today. —- It really doesn’t. First, that’s a Michigan case interpreting Michigan law. Almost every non trivial US company is incorporated in Delaware and subject to Delaware law. Delaware law does have somewhat similar cases, eBay v. Newmark is a good one to read but … Second, in both the Ford and Craigslist cases what was happening was really blatant. Courts are not in the business of deciding this or that corporate policy isn’t instantly maximizing shareholder value. What they won’t necessarily let you do is announce that you, being a controlling shareholder, never ever intend to make money and it sucks to be a minority shareholder.

Scubabear68 4y ago
Yep. The article is just flat wrong here. Companies have wide discretion on how they are run. Investors who want to change that have to get enough members on the board or attempt some variety of takeover or buy out.
pydry 4y ago
Yeah, this is bullshit. Shareholders aren't compelling this to happen. At most theyre cheering it on. This has more of a flavor of Google's 2011 "caught fixing wages and forced to pay a $300 million fine" scandal. Of course some believe that the idea that they might have done something that they have already been found guilty of in the past to be nothing more than a implausible harebrained conspiracy theory.
- WalterBright 4y ago
  Not to split hares, but thank you for spelling "hairbrained" correctly.
  - stuart78 4y ago
    Don’t you mean split hairs?
    - WalterBright 4y ago
      It depends on if you're threatening Bugs Bunny with a scimitar or not.
      - another2another 4y ago
        Well, if we really wanted to bisect the bunny we could go for 'hare-brained'.
    - jbigelow76 4y ago
      Splitting hares would be decidedly more gruesome.
deleted 4y ago
[deleted]
euroderf 4y ago
Asking for help here. There was a similar court case in the 80s. I believe it was a shareholder lawsuit and that it went all the way to the Supreme Court. The court was asked whether a company can take into account a variety of stakeholder & community interests in its decisionmaking, or must it seek to maximize shareholder return. In the case, the court ruled that shareholder return is the only legitimate goal. I suspect this case was very influential, and I would be grateful to anyone who can track it down.
- hgsgm 4y ago
  The point is that the meaning of "seek to maximize shareholder return" is defined almost entirely by management, not shareholders. That's what "management" means.
- bradleyjg 4y ago
  I don’t know of any such case, and I don’t see why it would be in front of the US Supreme Court. Burwell v Hobby Lobby Stores Inc. has language to the opposite conclusion, but it’s dicta.

Scubabear68 4y ago

Yep. The article is just flat wrong here. Companies have wide discretion on how they are run. Investors who want to change that have to get enough members on the board or attempt some variety of takeover or buy out.

pydry 4y ago

Yeah, this is bullshit. Shareholders aren't compelling this to happen. At most theyre cheering it on. This has more of a flavor of Google's 2011 "caught fixing wages and forced to pay a $300 million fine" scandal. Of course some believe that the idea that they might have done something that they have already been found guilty of in the past to be nothing more than a implausible harebrained conspiracy theory.

WalterBright 4y ago
Not to split hares, but thank you for spelling "hairbrained" correctly.
- stuart78 4y ago
  Don’t you mean split hairs?
  - WalterBright 4y ago
    It depends on if you're threatening Bugs Bunny with a scimitar or not.
    - another2another 4y ago
      Well, if we really wanted to bisect the bunny we could go for 'hare-brained'.
  - jbigelow76 4y ago
    Splitting hares would be decidedly more gruesome.

deleted 4y ago

[deleted]

euroderf 4y ago

Asking for help here. There was a similar court case in the 80s. I believe it was a shareholder lawsuit and that it went all the way to the Supreme Court. The court was asked whether a company can take into account a variety of stakeholder & community interests in its decisionmaking, or must it seek to maximize shareholder return. In the case, the court ruled that shareholder return is the only legitimate goal. I suspect this case was very influential, and I would be grateful to anyone who can track it down.

hgsgm 4y ago
The point is that the meaning of "seek to maximize shareholder return" is defined almost entirely by management, not shareholders. That's what "management" means.
bradleyjg 4y ago
I don’t know of any such case, and I don’t see why it would be in front of the US Supreme Court. Burwell v Hobby Lobby Stores Inc. has language to the opposite conclusion, but it’s dicta.